Short answer: Prior authorization is when your plan must approve a service or drug before it will pay. It’s used to control cost and confirm medical necessity, but it can delay care. In 2025 to 2026 the rules are tightening: CMS added Medicare Advantage guardrails, about 60 insurers pledged to cut it, and Texas limits AI-only denials and “gold cards” reliable providers out of it.
Prior authorization (also called preauthorization or precertification) is a utilization-review process: for certain services or drugs, the plan must approve the request before it will pay. Plans use it to manage cost and clinical appropriateness, but it’s a frequent source of care delays and denials.
If a prior authorization is denied, you have appeal rights: an internal appeal with the plan and, under the ACA, an independent external review.
Several 2025 to 2026 developments are reshaping it:
- Medicare Advantage guardrails (CMS): PA may be used only to confirm diagnosis or medical necessity, must follow traditional-Medicare coverage criteria, and an approval must remain valid for the course of treatment.
- Industry pledge (June 2025): roughly 60 insurers covering ~257 million people voluntarily agreed to reduce the services that require PA and to honor a prior plan’s authorization for 90 days after a person switches plans.
- Texas: SB 815 (effective 9/1/2025) bars AI or algorithms as the sole basis for a medical-necessity denial, and Texas “gold cards” exempt a provider from PA for a service after a strong approval track record.
The data shows why this matters: of Medicare Advantage prior-authorization denials, only a small share are appealed, but a large majority of those appeals are overturned, so it often pays to challenge a denial.
Sources
HealthCare.gov (CMS) Glossary, Preauthorization (a plan’s decision that a service/drug is medically necessary, required before coverage): .
healthcare.gov/glossary/preauthorizationMedicare Advantage prior-authorization rule, 42 CFR §422.138 (PA may be used only to confirm diagnosis or medical necessity; an approval stays valid for the course of treatment): .
law.cornell.edu/cfr/text/42/422.138AHIP, Health Plans Reduce Prior Authorization (June 2025 industry commitments: fewer services requiring PA and a 90-day transition honoring a prior plan’s authorization): .
ahip.org/news/articles/health-plans-reduce-prior-authorization-support-continuity-of-care-and-enhanced-consumer-communicationsTexas Legislature, SB 815 (89th Leg., effective Sept. 1, 2025; bars AI/algorithms as the sole basis for a medical-necessity denial): .
capitol.texas.gov/tlodocs/89R/analysis/html/SB00815I.htmKFF, Medicare Advantage Plans Denied a Larger Share of Prior Authorization Requests in 2022 (about 10% of denials were appealed, and roughly 83% of those appeals were overturned): .
kff.org/medicare/medicare-advantage-plans-denied-a-larger-share-of-prior-authorization-requests-in-2022-than-in-prior-years